Tel Aviv Labor Court Rules National Insurance Must Cancel Debts After Seven-Year Lapse
The Tel Aviv Regional Labor Court ruled that the National Insurance Institute must cancel old debts and refund deductions after a seven-year lapse in collection activity.
The Regional Labor Court in Tel Aviv has ruled in favor of a plaintiff who challenged old debts and benefit deductions imposed by the National Insurance Institute. The court determined that under the agency's regulations, debts must be canceled if more than seven years pass without proper collection activity.
The case involved a woman who returned to Israel after living abroad for approximately 20 years. Upon her return, the National Insurance Institute demanded payment for historical debts and subsequently deducted funds from her unemployment benefits and disability allowance.
According to the ruling, the last valid collection action took place in 2011, while the benefit deductions were executed in 2024. The court reviewed the relevant internal procedures, confirming that a lapse exceeding seven years invalidates the debt.
The court also dismissed the agency's claims regarding the plaintiff's conduct, finding no evidence of bad faith. It emphasized that citizens cannot be expected to reconstruct decades-old financial histories when the state institution failed to act in accordance with its own rules.
The lawsuit was accepted in full. The labor court ordered the National Insurance Institute to refund the amounts deducted from the unemployment and disability benefits, cancel all charges arising from repayment arrangements, and write off the remaining disputed debts.
